The China Student Boom and the Risks It Poses to Australian Universities

Salvatore Babones
20 August 2019 | AP5
The China Student Boom and the Risks It Poses to Australian Universities

Australia’s universities are taking a multi-million dollar gamble with taxpayer money to pursue a high-risk, high-reward international growth strategy. Their revenues are booming as they enrol record numbers of international students, particularly from China. As long as their bets on the international student market pay off, the universities’ gamble will look like a success. If their bets go sour, Australian taxpayers may be called on to pick up the tab.

This report establishes the scale of the universities’ China risk, assesses the difficulty of addressing it, and proposes steps to reduce it. It identifies seven leading universities where Chinese students seem to account for more than 50% of all international students, and finds that they rely on Chinese student course fees for anywhere from 13% to 23% of their total revenues. The report warns that the financial risks of over-reliance on China are very large and cannot be mitigated or diversified by greater recruitment in India. It also assesses nine potential risk factors that could adversely affect Chinese student numbers, and finds that macroeconomic risks are the most serious because they could lead to a sudden and severe fall in Chinese student enrolments.

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